Oil Rallies on Canadian Fire and Libya Violence
Never a dull moment in this market! Monday we had the big selloff to greet the month of May due to bad manufacturing data out of China and fears of global demand decreases in this oil glut. Two events has changed investors’ minds with wildfires in Canada that may disrupt oil output and further disruptions in Libya with eastern and western political factions fighting in a stalemate and preventing the cargo to be lifted out of port. In the overnight electronic session the June crude oil is currently trading at 4508 which is 130 points higher. The trading range has been 4532 to 4401 so far. We should see continued rallies heading into the weekend.
Japanese markets were closed due to a National holiday and reports on tap this morning are weekly Export Sales and Initial Jobless Claims at 7:30 and at 9:30 we have the weekly EIA Gas Storage where I am looking for an injection of 80 bcf. Speaking of natural gas the market is looking strong again in shoulder season with the June contract currently trading at 2.146 which is ½ of a cent higher. The trading range has been 2.165 to 2.134.
On the corn front the market is trading higher like the rest of the Grain complex. More seasonable weather is forecasted which will be conducive to farmers who are behind in plantings. We will continue to monitor the Argentine and Brazilian markets and if corn does reach the $4 level I expect farmers to be selling with both hands. In the overnight electronic session the May corn is currently trading at 375 ½ which is 2 ¼ cents higher. The trading range has been 375 ½ to 374. The May contract expires next Friday the 13th so tomorrow we will focus on the July contract.